Park Lawn drops a bombshell: Company announces it is going private
In news that was announced late on Monday, funeral home and cemetery operator Park Lawn Corporation announced that the company is planning on being taken private through a partnership that includes Birch Hill Equity Partners Management and an affiliate of Homesteaders Life Company, Viridian Acquisition.
Here is the press release that Park Lawn Corporation issued yesterday on the subject.
In what is termed as an “all-cash” transaction the press release states that the value of the purchase is $1.2 billion which includes Park Lawn debt. According to the press release the “new purchaser company” will purchase all of the issued and outstanding shares of Park Lawn Corporation at a per share price of $26.50, which the press release claims is a 62.1% premium to the closing price of Park Lawn Corporation stock as of yesterday.
Again according to the press release, each of the “Equity Funding Partners”, Birch Hill and Homesteaders, have provided an “Equity Commitment Letter” to the purchaser and the purchaser has a commitment from BMO Capital Markets for debt financing.
Brad Green, CEO of Park Lawn Corporation, made this prepared comment in the press release, “This Transaction represents tangible recognition of the value and strength of our organization. We are proud of the accomplishments of our team and look forward to partnering with Homesteaders and Birch Hill in a new chapter of Park Lawn where we can continue to execute on our strategic initiatives for the benefit of our stakeholders in the long-term.”
Funeral Director Daily will continue to bring our readers updates on this transaction as they happen.
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Too low
As I posted in the comments March 11th…
https://funeraldirectordaily.com/park-lawn-corp-reports-2023-revenues-increase-6-6/#comments
This isn’t a surprise.
This is a borderline insult to PLC shareholders on a few levels which I’ll get into in a second.
Rest assured SCI will have a counter ready in the next day or 2 IMO.
What this buy-out confirms, is the PLC board’s mistake in bringing in an inexperienced lawyer who worked a couple of years at another funeral company.
The real victims here are the people who listened to hours and hours of PLC quarterly updates ( Can we get our money back please?) Especially the last one from 2 weeks ago when this deal was well being tied up. Yes, you can’t tell the market but, you don’t go yapping about how much growth you’re planning and how you’re going to improve things in detail. (it would have been best to remove the Q&A or delay or cancel it.)
Every update was filled with pompous and borderline rude comments to the industry.
-Everyone overpaid, we didn’t.
-We are better operators than everyone else, yet every bad qtr. was going to get “fixed” by him “next quarter”.
-Everyone wants to sell to us but, we only accept the ones we want. Yet, with the best balance sheet in the industry, they could barely close on more than a few homes every 6 months.
-My favourite was when someone asked why there wasn’t more growth 18 months ago and there was a finger-waving monument “We are growing and you’ll SEE THAT very soon.” Then PLC buys just 5 homes in 6 months. Wow, you certainly schooled him Brad!
-They could SELL 25% of the business well. I’ll give them credit there.
*Brad and his team failed at running the business and couldn’t grow it.*
This B.O is just confirmation of that.
SCI won’t like paying the extra 28M break-up fee but, if it means Brad going back to the legal profession, maybe it’s worth it?
A few months ago I spent 2 hours and did an overlap and surprisingly beside maybe 10-20 locations there isn’t too much overlap in locations and the FTC may pass a purchase. Likely with another non-buying period, say 5 years?
PLC has some good clusters and SCI loves that.
I know SCI, hasn’t said anything yet but, they aren’t letting these assets go to private equity so they can pay $45 a share in 12 months. Plus, the value of having a buying competitor remove while CSV get’s their house in order is too great a chance to miss.
IMO, a $27-$29 offer is made. Then $30-$32 to close it.
I still can’t get over the gull of Brad. Just 12 months ago when PLC was at $23 he was saying how unhappy he was with the $23 share price and how he won’t allow it to stay down here too much longer (you know, because he’s a great operator. Lol!)
Well, I guess if you accept a $26 B.O offer, you get your wish.
Even though I’m being hard on Brad, how must the industry feel towards him?
Over the next 2 years, he had $200M+ to spend and no one would sell to him. Wow!
(I really hoped for a merger with Arbor, that would have been special.)
I’m upset as PLC could have been a great growth story like others in the past.
IMO, the board should have hired a Canadian or anybody with more experience.
I think we’ll see a new public consolator pop up in the next year or 2. Maybe more than 1.
Still 18,000 businesses out there and many with estate needs.
Good luck to all investors in the sector.